Restaurants Scale Back on Delivery

Labor shortages and more dine-in customers are the reasons why.

November 30, 2021


ALEXANDRIA, Va.—Restaurants are scaling back delivery during peak dine-in hours because of staff shortages and the return of customers eating on-site, reports the Wall Street Journal. Restaurants that are cutting back on delivery include Applebee’s, Cheesecake Factory, First Watch, IHOP and Olive Garden, among other restaurants.

“In that trade-off, we are always going to make sure that we’re serving the guests that are physically in front of us, because that experience has got to be right,” said John Peyton, CEO of IHOP and Applebee's parent company Dine Brands.

Applebee’s restaurants are shutting off delivery options on some evenings, and IHOP is not offering delivery on weekend mornings. Olive Garden parent company Darden Restaurants is minimizing delivery at its restaurants on the weekends when its brands can only take around four to-go orders every 15 minutes.

Bagel Point, based in Brooklyn, New York, uses delivery apps to fulfill orders but rejects 300 to 400 orders on most weekend days due to heavy in-store and to-go orders made directly with the restaurant. Brooklyn-based pizza company Fornino turns off the delivery apps when it gets too busy with in-person and orders from its website.

“People who come in, that make the effort to pick up or are dining in, get priority over the ones who sit at home drinking a glass of wine and having a discussion,” said Fornino founder Michael Ayoub.

DoorDash recently added a new feature on its app that automatically turns off delivery when a restaurant reaches its in-store dining limit, allowing operators to mark themselves as “busy” on the app. DoorDash is hosting a webinar next month to help restaurants manage the competing demands.

“Operators are struggling to prioritize the new digital customers they gained during the pandemic with the in-restaurant customers coming back,” said DoorDash. Restaurants can also pause delivery on Uber Eats and Grubhub.

Food delivery exploded last year because of the pandemic when restaurants weren’t allowed to take dine-in customers, but restaurants have largely reopened their dining rooms this year. However, more than a third of diners are opting for takeout and food delivery again, according to a poll of 1,003 adults by Lisa W. Miller & Associates in October. And restaurants are still making to-go orders—nearly 44% of orders at sit-down restaurants were made to-go in the year ended in September, up from 20% in the same period before the pandemic, according to market-research firm NPD Group Inc.

A report by Paytronix Systems found that 58% of U.S. consumers skip aggregators when ordering from their favorite restaurants. The report found that less than one-fifth of restaurant customers used an aggregator to order from their favorite eateries in the past three months. Ordering directly from the restaurant by phone or online remain much more popular options.

NACS Magazine covered the tradeoffs between using third-party delivery services and using store-owned services in “Delivery Dilemma” in the September 2021 issue and how third-party providers bring new consumers to c-stores but at a cost in “Delivering Convenience” in the December 2021 issue.